Independent Contractors

The Independent Contractor – Employers beware…

There is a growing phenomenon in the workplace today, that of the” independent contractor”. Essentially, this is a person who performs certain functions for an employer, just like an employee, but does not form part of the organisation and therefore is not considered to be an employee.

The benefits for the employer are obvious. There is no need to bother with UIF, PAYE, annual leave, sick leave, overtime, public holidays, disciplinary procedures or any of the multitude of headaches that come standard with an employment relationship.

This is all fine and well, if the intent of the relationship is truly an independent one. But, where a person is an integral part of the organisation and relies on a certain amount of job security, being labelled an “independent contractor” can result in major heartache and sudden uncertainty when that relationship comes to an abrupt end.

So, for those of you whose contract of employment states that you are an “independent contractor”, as well as those employers who like to use that terminology, please take the following to heart.

The Labour Relations Act (LRA), and the subsequent interpretation of it in case law, makes it very clear that the circumstances surrounding the relationship, as assessed by an arbitrator, will determine whether it is an employment relationship or whether it is of an independent nature, regardless of what the contract may state.

In summary, employers should note that hiding behind the label of “independent contractor” may not afford them the protection that they expect. And employees, if you suddenly find yourself without a job as an “independent contractor”, all may not be lost. Even if you are still employed, but do not enjoy the benefits of annual leave, overtime, UIF and so on, you may want to seek professional advice.

As always, if you need assistance or advice, contact me!

2 thoughts on “Independent Contractors”

  1. I would like to know if I have a claim for disparagement ? If yes, how do I peruse this claim ?
    I was an excellent employee for Hulamin in Pietermaritzburg for 25 years. I volunteered for retrenchment and started my own engineering company. I worked as a daily contractor for Hulamin for 3 years when I was suddenly terminated. An employee of mine was banned from Hulamin site. This employee then gave Hulamin a number of false allegations against me. Hulamin investigations could not prove these allegations and thus brought about a number of false statements against me. Hulamin said that they do not have anything to charge me that will stand in court. They said the reason for termination was to combat fraud and corruption. This has caused major damages to my business and to me personally.
    Please let me know if there is anything that I can do.

    1. Hi Siva

      This is still a test site, so it’s not monitored…

      As for your query, it would depend on the nature of your “daily” contract with Hulamin. The LRA provides for a test to be applied by an arbitrator to establish whether a true employment relationship exists / existed prior to “termination”. However, since you took voluntary retrenchment and started contracting to them independently, I doubt whether you would qualify as an “employee”. Without the employee status, the LRA and BCEA offer you virtually no protection.
      If anything, you should have your contract scrutinized by a commercial attorney or litigator to see if there’s room for a claim for breach.

      Good luck!

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